Meaningful differentiation

Differentiation is critical, but it’s easy to get it wrong.

In yesterday’s email, I told you about how I hired a cheaper contractor to build a deck and the very painful results of that decision.

Part of the difference between those two contractors was how they made decisionsthat would have long-lasting effects on the thing they were building. In a way, their worldview was part of their difference. I suspect the same is true of you.

To the cheaper contractor, crappy screws that would not last long in the harsh Oregon coast environment were functionally equivalent to more expensive screws, or even better because the cheaper screws saved him maybe several hundred dollars.

To the more expensive contractor, using premium screws was part of his justification for charging a higher price for the project. For example, when he came out to give us an estimate he mentioned stainless steel screws, which are very expensive. This contractor was not going to absorb the higher cost of the premium screws; in fact he was going to pass that cost right along to me and charge me a higher hourly rate for making this–and many other similarly better–judgement calls.

That, in a nutshell, is differentiation. Differentiation is the answer to the question: “How are you different than all the others out there with similar skills?”

When it comes to marketing your expertise in building software, differentiation is tricky. How do you help potential clients understand that you will make dozens, hundreds, or thousands of better judgement calls that may cost more in the short term but deliver significantly better results in the long term? And how do you do this without vomiting too many technical details all over them too early on in the marketing process? And how do you focus on stuff that actually matters to your clients?

By the way, a worldview that is focused on software quality is not the only effective differentiator. Speed may be another good one, or raw expertise may be yet another. I’m just talking about software quality here as an example of how you think about differentiation in general.

You can’t just punt on the differentiation question. If you do, you’re saying in effect: “I can’t tell you why I’m different than the ocean of developers out there with similar skills so I’m not even going to try.” When you do that, you agree to be viewed (and priced) as a commodity. As yet another Rails, NET, Java, or full-stack developer.

An effective differentiator depends on you (your way of viewing the world of software development) and your clients (what’s important to them). That’s why I can’t just type up a list of great differentiators for you here. It’s the Venn Diagram overlap between you and your best clients, and it’ll be different for every person.

Why does differentiation matter? Aside from helping you stand out from others with similar skills, it helps contextualize your pricing. In other words, it can help justify a premium price for your services.

I’ll continue this thread in tomorrow’s email.

In the meantime, check out this free email course on positioning. Positioning is the absolute foundation of effective differentiation, so you need to understand it: http://positioningcrashcourse.com